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Cost-Cutting Continues at Microsoft

Last week's announced layoffs made news, but there's more than just pink slips to Microsoft's cost-cutting measures.

This week, Microsoft announced that part of Iowa will remain prairie for longer than planned, as Redmond is delaying construction of a datacenter in West Des Moines. OK, we know -- West Des Moines (probably) isn't prairie land, but we like to think of Iowa as a verdant alternative to slushy suburban Boston.

It's a prudent move by Microsoft, of course, but we're wondering how much further Redmond will go to get the numbers back on track without hacking even more employees off the rolls. And as we've said before in this space, this downturn might be an opportunity for Microsoft to streamline operations a bit, to refocus on the technologies that made the company what it is as well as to concentrate on innovating for the future.

Of course, we at RCPU would love to see Microsoft pour money into nothing but Windows, Office, SaaS, enterprise servers and software, and the Partner Program, but we realize that Redmond might want to have a little more diverse a portfolio than that. Still, it could be time to pull back a bit on the quest to catch Google in consumer search or on some of the consumer stuff (we're looking at you, Zune) that really isn't part of the company's bread and butter.

Maybe it's also time to look at scaled-down versions of Windows and get a little more serious about Linux interoperability. As folks in Redmond know by now, just about everything in computing is getting simpler, smaller and cheaper, not the other way around. Vista was such a resource monster that it seemed to reflect a company out of touch with what both consumers and companies wanted and needed.

Hopefully cost-cutting in Redmond won't mean chunks being taken out of the Partner Program's budget or out of the money set aside for channel marketing and the like. There's no indication that anything like that is on the chopping block at this point, and the all-important server and tools business at Microsoft is one of the few areas that's still booming, relatively speaking.

So the channel doesn't seem likely to take much of a hit from Microsoft's budget pinch, which is a good thing. And if Microsoft itself can come out of this mini-crisis a more focused and in-touch company, the current financial cloud will have completed the old cliché by actually having a silver lining.

Where would you like to see Microsoft cut costs? How do you want the company to refocus? Sound off at

Posted by Lee Pender on 01/27/2009 at 1:22 PM


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